HOUSTON -- Tidel Technologies, Inc. (Nasdaq: ATMS) has completed the private sale of a $15 million subordinated convertible debenture to Dallas-based HBK Investments L.P. Value Investing Partners, Inc. of New York represented Tidel as the placement agent on the transaction.
Calling the transaction "an important step in our overall growth strategy," Tidel CEO James T. Rash said, "We intend to use the proceeds to capitalize on certain opportunities to enhance relationships with our existing customers as well as to attract new customers. In addition, the company is presently reviewing certain strategic investments to broaden our Chameleon product initiative."
The 6 percent subordinated debentures are convertible into Tidel common stock at $9.50 per share and mature in September 2004. In connection with the financing, Tidel also issued five-year warrants to HBK for the purchase of approximately 316,000 shares of common stock at an exercise price of $9.80 per share.
According to Tidel, the securities have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. Convertible debentures are hybrid securities that usually offer current income and can be converted into company stock. Their fortunes are closely tied to underlying stock prices.
The company said it expects to issue up to an additional $5 million of the subordinated convertible debentures under the same terms to three strategic investors later this month.
Tidel also received approval from Chase Manhattan Bank to increase its existing senior revolving credit line to $10 million. "These combined facilities should accommodate the company's increasing working capital needs as operations continue to expand," Rash said.
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